The government has decided to allow Apple to sell the latest version of its iPhone in Indonesia after the United States-based technology giant agreed to build a research and development center in the archipelago. (Reuters Photo/David Gray)

Apple to Sell iPhone 7 in Indonesia After Clearing Local Content Requirement

BY : HERMAN

DECEMBER 08, 2016

Jakarta. The government has decided to allow Apple to sell the latest version of its iPhone in Indonesia after the United States-based technology giant agreed to build a research and development center in the archipelago.

The previous version of Apple's smartphone, the iPhone 6, has been absent from Indonesian shopping malls after it failed to clear a government regulation that requires all 4G handheld devices to have at least 30 percent local content, either in hardware components, software, or investment value in the country.

Rudi Hendarwin, head of communication device standardization at the Ministry of Communications and Information Technology, said the government decided to grant permits to Apple after the company gave a commitment to establish a local R&D center over the next six months.

"The local content certificate has been issued for the iPhone 7 this month, so Apple can start selling the devices here," Rudi said.

"We will continue to monitor and evaluate the extent of Apple's investment every three months. If it cannot meet the requirement by July 27, 2017, we will withdraw its certificate," Rudi said.

The ministry did not reveal how much Apple was planning to invest in Indonesia.

Under Industry Ministry regulations that become effective in July, direct investment of between Rp 550 billion and Rp 700 billion ($41 million-$52 million) in Indonesia would automatically clear a smartphone maker from the 30-percent local-content threshold.

Indonesia is the third-largest smartphone market in Asia Pacific after China and India, with 65 million devices estimated to be sold this year, up 18 percent from last year, according to global research firm International Data Corporation (IDC).

Samsung leads the pack with 26 percent market share, offering a wide range of products from premium devices, such as the Galaxy series, to devices that cost around Rp 1,3 million to Rp 2 million – a price range preferred by most Indonesian consumers.

China's OPPO follows in a distant second place with 19 percent market share and Taiwan's Asus with 9 percent. Home-grown brand Advan is in fourth place with 8 percent market share, while China's Lenovo holds 6 percent, IDC data showed.

SHARE